Analyst: Sanctions Against Russia Caused a Global Weakening of the Dollar

The reality of the market requires the easing of sanctions, as the restrictive measures against Russia caused a global weakening of the dollar. This was stated by financial analyst Todd Wood, 20 years of experience as a bond trader on Wall Street, in an interview to Tvzvezda.

According to Wood, the EU is now facing many problems, starting with the migrants situation and economic issues, and ending in the unstable situation of the Euro and a possible British exit from the EU. Like the analyst, so many questions arise in connection with the way the EU will look like in the future.

"Of course, if you take such a big market like Russia from the EU, especially in Greece and Eastern Europe, lost trade becomes another factor of pressure. There are political parties that use this problem and are trying to receive the votes of those who have suffered the most from this state of affairs. Now there is a very difficult situation. We will look further, but everything will depend on what will happen next year," he said.

The analyst acknowledged that the impact of sanctions on Western Europe had a negative impact, but could not give an exact number, explaining that it all depends on the particular state. But, Wood said, it is obvious that the first to suffer was Greece and other Mediterranean countries – more than, for example, Germany or the UK.

"Although the UK is very lost in the financial sector due to the outflow of Russian capital. From an economic point of view, the sanctions against Moscow were ineffective," stated the former trader.

Wood explained that in the long term, this prompted Russia to strengthen cooperation with China, and other eastern markets of hydrocarbons, as ties between Moscow and Beijing improved many times. In particular, there are many new joint ventures in the far east.

"To some extent, the sanctions have opened the eyes of Russia and China to the opportunity to build their own trading relationship, should they want a way to remove the dollar from their transactions, such as oil and any other commodities that have historically been traded in dollars. I know both Russia and China seek to strengthen their national currencies by direct trade, without the dollar," he says.

It will have an impact on the Dollar in the long run, says the analyst. Especially if the US does not solve the issue of public debt.

"Regarding the fact that the dollar is losing its reserve currency status, Yes, it is slowly happening all around the world," concluded Wood.